Dy.Commissioner of Income Tax, Sitapur V. Kisan Sahkari Chini Mill Ltd., Sitapur

ITA 130/LKW/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92219 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-07-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 15-06-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 03-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K ARORA
• Keywords: Opportunity of being heard

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.130/LKW/2014 ASSESSMENT YEAR:2006 - 07 KISAN SAHKARI CHINI MILL LTD., MAHMOODABAD, SITAPUR. PAN:AAHCS6558H VS DY.C.I.T., SITAPUR. (RESPONDENT) (APPELLANT) SHRI PUNEET KUMAR , D. R. APPELLANT BY SHRI S. K. ARORA, C. A. RESPONDENT BY 15/06/2015 DATE OF HEARING 21 /07/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A), BAREILLY DATED 03/12/2013 FOR THE ASSESSMENT YEAR 2006 - 2007. 2. GROUND NO. 1 IS AS UNDER: 1. THAT THE COMMISSIONER OF INCOME TAX (APPEALS ) IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.22,725/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PRESS MUD A ND THE CIT(A) HAS NOT APPRECIATED THE FACTS AND CIRCUMSTANCES AS MENTIONED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. 3. LEARNED D. R. OF THE REVENUE SUPP ORTED THE ASSESSMENT ORDER WHEREAS LEARNED A. R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). HE ALSO SUBMITTED THAT ON PAGE NO. 1 OF THE PAPER BOOK IS COPY OF FORM R. T. 7 (C) S.M. 2 REPORT AND COPY OF SCHEDULE - K. HE ALSO SUBMITTED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL ORDER IN 2 ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2005 - 06 IN I.T.A. NO.303/LKW/2013 DATED 24/04/2014, COPY AVAILABLE ON PAGES 76 TO 84 OF THE PAPER BOOK. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS . WE FIND THAT IN ASSESSMENT YEAR 2005 - 06 IN ASSESSEES OWN CASE, SIMILAR ISSUE WAS DECIDED BY THE TRIBUNAL AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008 - 09 IN I.T.A. NO.4 09/LKW/2013 DATED 29/11/2013. SINCE LEARNED D.R. OF THE REVENUE COULD NOT POINT OUT ANY DIFFERENCE IN FACTS AS COMPARED TO THE FACTS IN ASSESSMENT YEAR 2005 - 06 AND 2008 - 09 WHEREIN THE TRIBUNAL DECIDED THE SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE, WE DO NOT FIND ANY REASON TO TAKE A CONTRARY VIEW. ACCORDINGLY, THIS GROUND OF REVENUE IS REJECTED. 5. GROUND NO. 2 IS AS UNDER: 2. THAT THE COMMISSIONER OF INCOME TAX ( APPEALS) IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.35,67,752/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INTEREST PAYABLE ON LOAN FROM SUGAR DEVELOPMENT FUND AND THE CIT (A) HAS NOT CONSIDERED THE FACTS AND CIRCUMSTANCES AS MENTIONED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. 6. LEARNED D. R. OF THE REVENUE SUPPORTED THE ASSESSM ENT ORDER WHEREAS LEARNED A. R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). HE ALSO SUBMITTED THAT COMPUTATION OF INCOME SUBMITTED BY THE ASSESSEE ALONG WITH THE RETURN OF INCOME IS AVAILABLE ON PAGES 11 & 12 AND ON PAGE NO. 9 OF THE PAPER BOO K IS LEDGER COPY OF ACCOUNT OF INTEREST ACCRUED AND DUE BUT NOT PAID ON SECURED LOAN. HE POINTED OUT THAT IN COMPUTATION OF INCOME, THE ENTIRE AMOUNT OF ACCRUED INTEREST FOR PRESENT YEAR OF RS.51,30,697/ - HAS BEEN ADDED BACK AND THEREFORE, NO FURTHER ADDI TION IS CALLED FOR. 3 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT IN THE ASSESSMENT ORDER ON PAGE NO. 5, THE ASSESSING OFFICER HAS COMPUTED THE INCOME BY ADOPTING A FIGURE OF NET LOSS AS PER PROFIT & LOSS ACCOUNT RS.8,92,21,605.05 AS HAS BEEN CONSIDERED BY THE ASSESSEE IN COMPUTATION OF INCOME AVAILABLE ON PAGE 11 OF THE PAPER BOOK. THE ASSESSING OFFICER HAS MADE ADDITION OF THIS AMOUNT OF RS.51,30,697/ - ON ACCOUNT OF INTEREST ON LOAN TAKEN FROM SDF AND THE SAME AMOUNT WAS ADDED BY THE ASSESS EE ALSO IN ITS COMPUTATION OF INCOME. TO THIS EXTENT, THERE IS NO DISPUTE BUT THE ASSESSING OFFICER HAS ALSO MADE ADDITION OF RS.35,65,752/ - ON ACCOUNT OF ACCRUED INTEREST. THIS AMOUNT OF ADDITION WAS WORKED OUT BY THE ASSESSING OFFICER ON THE BASIS THA T AS PER SCHEDULE - C OF ACCRUED INTEREST, RS.3,81,83,228/ - HAS BEEN SHOWN PAYABLE AS AGAINST 3,46,17,476/ - SHOWN IN THE IMMEDIATELY PRECEDING YEAR AND ON THIS BASIS, THE ASSESSING OFFICER HAS COME TO THE CONCLUSION THAT THERE IS ACCRUED INTEREST OF RS.35,65 ,752/ - RELATING TO THE YEAR UNDER CONSIDERATION. AS PER THE LEDGER ACCOUNT, AVAILABLE ON PAGE NO. 9 OF THE PAPER BOOK, THERE IS OPENING BALANCE OF RS.3,46,17,476/ - TO WHICH THE AMOUNT OF PRESENT YEARS ACCRUED INTEREST OF RS.51,30,697/ - WAS ADDED RESULTING INTO TOTAL OF RS.3,97,48,173/ - AND AGAINST THIS, THERE ARE TWO PAYMENTS TOTALING RS.15,64,945/ - AND AFTER DEDUCTING THIS PAYMENT, THE NET BALANCE HAS BEEN SHOWN AT RS.3,81,83,228/ - . WHEN THE ASSESSEE HAS SUO MOTU ADDED THE ENTIRE AMOUNT OF THE PRESENT YE AR ACCRUAL OF RS.51,30,697/ - , NO FURTHER ADDITION IS CALLED FOR ON ACCOUNT OF SUCH UNPAID INTEREST ON SECURED LOANS AND THEREFORE, THE SAME WAS RIGHTLY DELETED BY CIT(A) AND HENCE, WE DECLINE TO INTERFERE IN THE ORDER OF CIT(A) ON THIS ISSUE. THIS GROUND IS REJECTED. 8. GROUND NO. 3 IS AS UNDER: 3. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.84,20,000/ - RIGHTLY MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNSECURED 4 LOAN FROM THE U.P. COOPERATIVE SUGAR FAC TORIES FEDERATION LIMITED , LUCKNOW FOR CANE PRICE PAYMENT AND THE CIT (A) HAS NOT CONSIDERED THE FACTS AND CIRCUMSTANCES AS MENTIONED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. 9. LEARNED D. R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREA S LEARNED A. R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THIS ISSUE WAS DECIDED BY LEARNED CIT(A) BY MAKING FOLLOWING OBSERVATIONS ON PAGE 5 OF HIS ORDER, WHICH ARE REPRODUCED BEL OW FOR THE SAKE OF READY REFERENCE: - DECISION AND REASONS THEREFOR I HAVE CAREFULLY CONSIDERED THE ISSUE, PERUSED THE ASSESSMENT ORDER AND GONE THROUGH THE DETAILED WRITTEN SUBMISSIONS. THE ASSESSEE HAS RECEIVED RS.17500000.00 FOR CANE PRICE PAYMENT FROM U.P. COOPERATIVE SUGAR FACTORIES FEDERATION LTD. LUCKNOW AND REPAID RS.9080000.00 AGAINST THE SAME. THE U.P. COOPERATIVE SUGAR FACTORIES FEDERATION LTD. IS REGULAR ASSESSEE WITH JCIT - II LUCKNOW HAVING PAN - AAAAU 0391D AND THUS THE GENUINENESS OF LOAN C ANNOT BE DOUBTED. IN THE CIRCUMSTANCES OF THE CASE, THE ADDITION AS MADE BY THE AO IS DELETED. 11. WE FIND THAT ON PAGE NO. 2 OF THE ASSESSMENT ORDER, IT IS NOTED BY THE ASSESSING OFFICER THAT QUERY WAS RAISED REGARDING LIABILITY SHOWN FOR CAN PRICE PA YMENT IN SCHEDULE - D OF RS.1,34,20,000/ - VIDE LETTER DATED 04/07/2008 AND THE ASSESSEE WAS REQUIRED TO PROVE THE GENUINENESS OF THIS LIABILITY. THE ASSESSING OFFICER HAS ALSO NOTED THAT THE ASSESSEE HAS COMPLIED WITH OTHER REQUIREMENTS BUT HAS SAID NOTHING ON THIS ACCOUNT. THEREAFTER, THE ASSESSING OFFICER HAS NOTED THAT ON GOING THROUGH THE DETAILS, IT IS NOTICED THAT THE LIABILITY IN THIS HEAD AS ON 31/03/2005 WAS RS.50 LAC AND AFTER REDUCING THE SAME LIABILITY GENERATED DURING THE YEAR 5 WAS WORKED OUT AT RS.84,20,000/ - . THE ASSESSING OFFICER MADE ADDITION OF RS.84.20 LAC BEING INCREMENTAL LIABILITY OF THE PRESENT YEAR. AGAINST THIS OBJECTION OF THE ASSESSING OFFICER THAT THE ASSESSEE HAS NOT ESTABLISHED THE GENUINENESS OF THE INCREMENTAL LIABILITY, THE CIT(A) HAS DECIDED THE ISSUE ON THE BASIS THAT THE ASSESSEE RECEIVED AN AMOUNT OF RS.17500000.00 FROM U.P. COOPERATIVE SUGAR FACTORIES FEDERATION LTD. LUCKNOW AND REPAID RS.9080000.00 AND U.P. COOPERATIVE SUGAR FACTORIES FEDERATION LTD. IS REGULAR ASSESSE E WITH JCIT - II LUCKNOW HAVING PAN - AAAAU 0391D AND THUS THE GENUINENESS OF LOAN CANNOT BE DOUBTED. WHEN THIS IS THE ADMITTED POSITION THAT THE ASSESSEE HAS NOT GIVEN ANY REPLY TO THE ASSESSING OFFICER REGARDING GENUINENESS OF THIS LIABILITY, CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION WITHOUT OBTAINING REMAND REPORT FROM THE ASSESSING OFFICER ON THIS ASPECT AND SINCE THIS WAS NOT DONE BY LEARNED CIT(A), WE ARE OF THE OPINION THAT HIS ORDER IS NOT SUSTAINABLE BUT AT THE SAME TIME, WE FEEL THAT IN THE I NTEREST OF JUSTICE, THE MATTER SHOULD GO TO LEARNED CIT(A) TO DECIDE THE ISSUE AFRESH AFTER OBTAINING REMAND REPORT AND THEREFORE, WE SET ASIDE THE ORDER OF LEARNED CIT(A) ON THIS ISSUE AND RESTORE THE MATTER TO HIS FILE FOR FRESH DECISION IN THE LIGHT OF ABOVE DISCUSSION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES. ACCORDINGLY, GROUND NO. 3 IS ALLOWED FOR STATISTICAL PURPOSES. 12. GROUND NO. 4 IS AS UNDER: 4. THAT THE COMMISSIONER OF INCOME TAX (APPEALS ) IS NOT JUSTIFIED IN D ELETING THE ADDITION OF RS.8,45,133.13 RIGHTLY MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DEDUCTION OF SHARE MONEY FROM PRODUCER, MEMBERS AND THE CIT(A) HAS NOT CONSIDERED THE FACTS AND CIRCUMSTANCES AS MENTIONED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. 13. LEARNED D. R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A. R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). HE ALSO SUBMITTED THAT THE REPLY GIVEN BY THE ASSESSEE BEFORE THE 6 ASSESSING OFFICER AS PER LETTER DATED 05/09/2008 IS AVAILABLE ON PAGES 66 TO 69 OF THE PAPER BOOK. HE ALSO SUBMITTED THAT THE COPY OF LEDGER ACCOUNT IS AVAILABLE ON PAGES 95 AND 96 OF THE PAPER BOOK. HE ALSO DREW OUR ATTENTION TO PAGE NO. 28 & 29 OF THE PAPER BOOK CONTAINING LEDGER ACCOUNT C OPY FOR THE PRESENT YEAR. 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT AS PER COPY OF LEDGER ACCOUNT FOR THE PRESENT YEAR AVAILABLE ON PAGES 28 AND 29 OF THE PAPER BOOK, THERE IS OPENING BALANCE OF RS.1,05,88,001.75 AND THE CLOSING BALANCE IS RS.1,07,99,684.88. AS PER THE COPY OF LEDGER ACCOUNT OF SUCCEEDING YEAR AVAILABLE ON PAGES 95 AND 96 OF THE PAPER BOOK, THE OPENING BALANCE IS THE SAME AS CLOSING BALANCE IN THE PRESENT YEAR AND THERE IS TRANSFER OF FULLY PAID SHARES OF RS.3.75 LAC ON 31/03/2007 LEAVING A CLOSING BALANCE OF RS.1,12,10,311.28. HENCE, IT IS SEEN THAT THERE WAS ALLOTMENT OF SHARES OF RS.3.75 LAC IN THE NEXT YEAR AND THERE IS ALLOTMENT OF SHARES OF RS.7,34,700/ - IN THE PRESENT YEAR. IN THE LIGHT OF THESE FACTS, WE EXAMINE THE FINDING OF LEARNED CIT(A) AND THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AS AVAILABLE ON PAGES 66 TO 69 OF THE PAPER BOOK. IN THE SAID REPLY, WE FIND THAT IT IS SUBMITTED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER THAT THERE WAS OPENING BALANCE OF RS.105.88 LAC ON 01/04/2005 AND THE AMOUNT TAKEN WAS RS.9.46 LAC AGAINST WHICH ALLOTMENT OF SHARES WAS MADE OF RS.7.35 LAC IN THE PRESENT YEAR AND NOW IT HAS BEEN SHOWN TO US THAT THERE WAS FURTHER ALLOTMENT OF SHARES OF RS.3.75 LAC IN NEXT YEAR. HENCE, IF WE CONSIDER THE ALLOTMENT OF SHARES IN THE PRESENT YEAR AND NEXT YEAR, WE FIND THAT TOTAL IS MORE THAN AMOUNT TAKEN IN THE PRESENT YEAR. THIS IS THE POLICY OF THE ASSESSEE THAT ALLOTMENT IS MADE WHEN THE AMOUNT OF A GROWER COMES T O RS.100/ - AND EVERY YEAR SOME ALLOTMENTS ARE MADE. CONSIDERING ALL THESE FACTS, WE FEEL THAT THE ADDITION MADE BY THE ASSESSING OFFICER IS NOT JUSTIFIED AND THEREFORE, WE DECLINE TO INTERFERE IN THE ORDER OF LEARNED CIT(A). THIS GROUND IS REJECTED. 7 15. GROUND NO. 5 IS AS UNDER: 5. THAT THE COMMISSIONER OF INCOME TAX (APPEALS ) IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.22,50,165/ - RIGHTLY MADE BY THE ASSESSING OFFICER ON ACCOUNT OF NON - REFUNDABLE DEPOSIT AND THE CIT(A) HAS NOT CONSIDERED THE FACTS AND CIRCUMSTANCES AS MENTIONED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. 16. LEARNED D. R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A. R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). HE ALSO SUBMITTED THAT SIMILAR ISSUE WAS INVOLVED IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2005 - 06 IN I.T.A. NO.303/LKW/2013 DATED 24/04/2014. HE SUBMITTED THAT THE TRIBUNAL ORDER IS AVAILABLE ON PAGES 76 TO 84 OF THE PAPER BOOK AND THE RELEVANT PARAS ARE PARA NO. 29 TO 31. 17. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT IN ASSESSMENT YEAR 2005 - 06, THIS ISSUE WAS DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE BY FOLLOWING A JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT RENDERED IN THE CASE OF CIT VS. RAMALA SAHKARI CHINI MILLS LTD. [2005] 278 ITR 670 (ALL) AND ALSO A JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF SIDDHESHWAR SAHKARI SAKHAR KARKHANA LTD. VS. CIT [2004] 270 ITR 1 (SC). NO DIFFERENCE IN FACTS COULD BE POINTED OUT BY LEARNED D.R. OF THE REVENUE A ND THEREFORE, WE DO NOT FIND ANY REASON TO TAKE A CONTRARY VIEW IN THE PRESENT YEAR. HENCE, BY RESPECTFULLY FOLLOWING THE TRIBUNAL DECISION FOR ASSESSMENT YEAR 2005 - 06, WE DECLINE TO INTERFERE IN THE ORDER OF LEARNED CIT(A). GROUND NO. 5 IS REJECTED. 18 . GROUND NO. 6 IS AS UNDER: 6. THAT THE COMMISSIONER OF INCOME TAX (APPEALS ) IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.13,41,800/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PAYMENT OF SUBSCRIPTION TO FEDERATION UNDER SECTION 40(A) (IA) OF THE INCOME TAX ACT AND THE CIT (A) HAS NOT 8 CONSIDERED THE FACTS AND CIRCUMSTANCES AS MENTIONED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. 19. LEARNED D. R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A. R. OF THE A SSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). HE ALSO SUBMITTED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL DECISION IN THE CASE OF ACIT, SITAPUR VS. KISAN SAHKARI CHINI MILL LTD. SAMPURNANAGAR, LAKHIMPUR KHERI IN I.T.A. NO.406 T O 409/LKW/2013 DATED 29/11/2013. HE ALSO SUBMITTED THAT THE COPY OF THE TRIBUNAL ORDER IS AVAILABLE ON PAGES 70 TO 75 OF THE PAPER BOOK AND IN PARTICULAR, HE DRAWN OUR ATTENTION TO PARA 10 OF THIS TRIBUNAL ORDER. 20. WE HAVE CONSIDERED THE RIVAL SUBMISSI ONS. WE FIND THAT IN THE CASE CITED BY LEARNED A.R. OF THE ASSESSEE, THE TRIBUNAL HAS CONSIDERED THIS ISSUE AS TO WHETHER THE ACTIVITIES OF SERVICES RENDERED BY FEDERATION IS PROFESSIONAL OR TECHNICAL SERVICES AND THEREFORE, TDS WAS REQUIRED TO BE MADE U/ S 194J OF THE ACT. THE TRIBUNAL HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND IT WAS HELD THAT THE SERVICES RENDERED BY FEDERATION DOES NOT COME WITHIN THE DEFINITION OF ANY SERVICES RENDERED U/S 194J OF THE ACT. SINCE THE FACTS IN DISPUTE IN THE PRESENT CASE ARE IDENTICAL, WE DO NOT FIND ANY REASON TO TAKE A CONTRARY VIEW AND BY RESPECTFULLY FOLLOWING THE TRIBUNAL DECISION (SUPRA), WE DECLINE TO INTERFERE IN THE ORDER OF LEARNED CIT(A). GROUND NO. 6 IS REJECTED. 21. GROUND NO. 7 IS AS UNDER: 7. THAT THE COMMISSIONER OF INCOME TAX (APPEALS ) IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.3,90,0062.46 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SCHOOL FUND AND THE CIT(A) HAS NOT CONSIDERED THE FACTS AND CIRCUMSTANCES AS MENTIONED BY THE ASSESS ING OFFICER IN THE ASSESSMENT ORDER. 9 22. LEARNED D. R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A. R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). 23. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THIS ISSUE WAS DECIDED BY CIT(A) AFTER MAKING FOLLOWING OBSERVATIONS ON PAGE NO. 10 & 11 OF HIS ORDER, WHICH ARE REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: - DECISION AND REASONS THEREFOR I HAVE CAREFULLY CONSIDERED THE ISSUE, PERUSED THE ASSESSMENT ORDER AND GONE THROUGH THE DETAILED WRITTEN SUBMISSIONS. IT IS NOTICED FROM THE ASSESSMENT ORDER THAT THE AO WHILE MAKING THE ADDITION OBSERVED IN THE ORDER THAT THE DEDUCTION FROM GROWERS TOWARDS SCHOOL FUND IS SELF GENERATED LIABILITY. ASSESSEE IS RUNNING SCHOO L FOR WELFARE OF EMPLOYEES AND IF ANY DEDUCTION ON THIS ACCOUNT IS MADE SHOULD BE PAID TO CONCERNED INSTITUTION FOR THE PURPOSES OF WHICH IT IS DEDUCTED. SINCE THE ASSESSEE HAS DEDUCTED FULL PRICE OF THE CANE IN THE TRADING ACCOUNT BUT LESS PRICE IS PAID T O CANE SOCIETY MEANING THEREBY EXCESS EXPENDITURE TO THE TUNE OF RS.390062.46' ON THE OTHER HAND THE AR FOR THE APPELLANT CLAIMED THAT NO DEDUCTION FROM THE CANE PRICE PAYMENT HAS BEEN MADE AND VIDE REPLY DATED 05/09/2008 THE COPY OF ACCOUNT OF DEDUCTION ON ACCOUNT OF SCHOOL FUND HAS BEEN SUBMITTED DURING THE COURSE OF HEARING VIDE ORDER REPLY DATED 05/09/2008. THE APPELLANTS AR ALSO FILED A COPY OF THE REPLY DATED 05/09/2008 WHICH FIND PLACE IN THE PAPER BOOK AT SL NO. 66 TO 69. IN VIEW OF THE DETAILS AS FILED, ACTION OF THE ASSESSING OFFICER IN MAKING THE ADDITION IS NOT MAINTAINABLE AND THE SAME IS DELETED. 23.1 FROM THE ABOVE PARA FROM THE ORDER OF LEARNED CIT(A), WE FIND THAT NO DEDUCTION WAS MADE IN THE PRESENT YEAR. WE ALSO FIND THAT THE COPY OF LEDGER ACCOUNT IS AVAILABLE ON PAGE NO. 62 OF THE PAPER BOOK AND AS PER THE SAME, THERE IS OPENING BALANCE OF RS.39 0062.46 AND THE SAME AMOUNT IS THE CLOSING BALANCE AND THEREFORE, THERE IS NO DEDUCTION FROM CANE GROWERS IN THE PRESENT YEAR. IN VIEW OF THIS FACT THAT THERE IS NO DEDUCTION 10 IN THE PRESENT YEAR, THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS NOT JUSTI FIED AND THEREFORE, WE HOLD THAT THE SAME WAS RIGHTLY DELETED BY LEARNED CIT(A). THIS GROUND IS REJECTED. 24. GROUND NO. 8 IS AS UNDER: 8. THAT THE COMMISSIONER OF INCOME TAX (APPEALS ) IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.8,68,560/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF LINK ROAD AND THE CIT (A) HAS NOT APPRECIATED THE FACTS AND CIRCUMSTANCES AS MENTIONED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. 25. LEARNED D. R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A . R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). HE ALSO SUBMITTED THAT THE LEDGER ACCOUNT IS AVAILABLE ON PAGE 64 OF THE PAPER BOOK AND FROM THE SAME, IT CAN BE SEEN THAT THE AMOUNT OF RS.8,68,560/ - IS OPENING BALANCE. 26. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS MADE ADDITION OF RS.8,68,560/ - BY STATING THAT THIS AMOUNT HAS NOT BEEN DEPOSITED TILL THE FILING OF RETURN OF INCOME AND SINCE IT IS SELF - GENERATED LIABILITY AND ADDIT ION WAS MADE. WE FAIL TO UNDERSTAND THAT WHEN THIS IS OPENING BALANCE THEN HOW IT CAN BE INCOME OF THE PRESENT YEAR. WE DECLINE TO INTERFERE IN THE ORDER OF CIT(A). THIS GROUND IS REJECTED. 27. GROUND NO. 9 IS AS UNDER: 9. THAT THE COMMISSIONER OF IN COME TAX (APPEALS ) IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.6,85,397.79 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF EYE RELIEF AND THE CIT (A) HAS NOT CONSIDERED THE FACTS AND CIRCUMSTANCES AS MENTIONED BY THE ASSESSING OFFICER IN THE ASSESSMENT OR DER. 11 28. LEARNED D. R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A. R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). 29. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THIS AMOUNT WAS ALSO ADDED BY THE ASSESSING OFFICER BY MAKING THIS OBSERVATION THAT THIS AMOUNT OF RS.6,85,397.79 HAS NOT BEEN DEPOSITED TILL THE FILING OF RETURN OF INCOME AND THIS IS SELF - GENERATED LIABILITY. COPY OF LEDGER ACCOUNT IS AVAILABLE ON PAGE NO. 65 OF THE PAPER BOOK AND FROM THE SAME, THIS IS SEEN THAT IT IS OPENING BALANCE AND THEREFORE, THIS AMOUNT ALSO CANNOT BE ADDED IN THE PRESENT YEAR. WE, THEREFORE, DECLINE TO INTERFERE IN THE ORDER LEARNED CIT(A). THIS GROUND IS REJECTED. 30. IN THE RESULT, THE APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 21 /07/20 15 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR